We cut down the biggest expense in our budget—our housing costs—by $1,125 a month by switching from renting to buying!
Have you ever heard the phrase “house poor”—where you can’t afford anything other than putting a very expensive roof over your head? That would have been us if we hadn’t made some drastic changes. When my husband and I were both working, shelling out $1800 a month for rent was shockingly expensive, but doable. It came with a community center, a pool, and a beautiful porch (I love porches!). However, if I was to ever quit my job and be a stay-at-home mom, the first thing we had to do was find affordable housing.
Renting is expensive, it can be smarter to buy—if you can.
When you rent, you can’t build equity, and you are almost always overcharged. If you are spending an arm and a leg on rent, and want to live a lifestyle with more financial peace instead of worrying about where your rent money will come from every month, make buying a home your goal.
Do your research and get not only a good mortgage rate, but the type of mortgage that is appropriate for your financial situation—they aren’t all created equal.
Save up money (and pray!) for a down payment and closing costs, but don’t despair if you don’t have any money just yet. There are loans out there for people who don’t have anything to put down—be careful, though, because you are paying interest on those extra dollars in your mortgage, and interest adds up quick!
If you are on a tight budget, you will have to make sacrifices when it comes to your home.
I know a lot of people who are waiting for the “perfect home” for years and end up paying thousands of dollars on unnecessary rent. I am not saying you settle for something you can’t live with, but compromise is critical if you want to get a good deal.
The one thing I wanted in my new house is a front porch… at the end of the day, I didn’t get it. However, what I did get is an affordable home that was clean and safe and in a good neighborhood, so maybe later in life I will get my porch. For now, we bought the home that was right for our budget and our family.
The only place we were able to find lots of homes in our price range was over an hour from my husband’s work…and out of state! I never intended to move so far from my husband’s family but this was something we had to be flexible on if we were going to find a home within our budget.
I know that a commute can be a hardship, but sometimes living farther away from your work really does pay off big time. Our family is very lucky that my husband is a teacher, he has shorter hours and he doesn’t work all year. It is a perfect commuting situation. Moving far from his work has allowed us to buy a home that we can not only afford—but that we actually have hope of paying off one day!
We saved $13,500 a year—just by moving out!
Our home isn’t perfect, but the money we are saving on our living expenses is huge! We went from paying $1800 a month on rent to paying $675 on our mortgage. Talk about a difference! And the best part of buying a home within your budget is that there is a realistic chance to pay it off. Many people who live in the expensive area we moved out of never even dreamed they could pay off their home. I honestly think their plan was to jump from home to home, mortgage to mortgage, until they retire. We wanted to break free from that, so buying an inexpensive home that we can actually pay off was the best choice for our family.
If you are looking to cut expenses so you can be a stay-at-home mom or dad, or if you just need to get your finances back on track, it is worth looking into moving out of your rental. It made a huge difference for my family, and it got us on track to start saving money and changing our life. When you free yourself from your biggest expense, it can snowball into paying off debt, saving for retirement, saving for your children’s college—and just freeing you for the life you are meant to lead.